Rapamycin is a microbial product with potent antiproliferative and immunosuppressive activities via its ability to inhibit signal transduction. Rapamycin has recently been approved by the FDA as an immunosuppressive drug, and phase II clinical trials in cancer patients are in progress as a novel chemotherapy agent. In both yeast and mammalian cells, rapamycin action is mediated by its association with the peptidyl prolyl isomerase FKBP12. The rapamycin-FKBP12 targets were first identified as the highly homologous TOR1 and TOR2 genes by genetic studies in yeast, and subsequently, a mammalian ortholog (mTOR) was discovered. The TOR proteins have a C-terminal domain with similarity to protein and lipid kinases. Detailed studies have revealed the TOR proteins have an intrinsic protein kinase activity. The FKBP12-rapamycin complex inhibits the TOR kinases, which regulate cell proliferation, translation and transcription and cell responses to nutrient availability, including authophagy, ribosome biogenesis and cell mating. In both yeast and mammalian cells the TOR proteins regulate translation initiation and G1 to S phase cell cycle progression. Recent studies have revealed a novel role for the TOR pathway in yeast in regulating ribosomal protein, ribosomal RNA, and tRNA gene expression in response to nutrients. In addition, TOR controls expression of nitrogen utilization genes. The precise mechanisms of this regulation are unknown but recent evidence has indicated that the role of TOR in these processes is largely mediated via control of type 2A protein phosphatases (PP2A). Although studies in both yeast and mammalian cells have indicated that the TOR kinases signal in response to nutrients and mitogens, little is known about the mechanisms by which TOR is activated. Our proposed studies seek to define the role of PP2A in TOR action, to determine the molecular mechanisms by which nutrient signals activate the TOR kinases, and to explore the role of the TOR pathway in regulating expression of genes encoding ribosomal proteins. These studies will provide information about the mechanisms of rapamycin action, which has been conserved from yeast to mammals, and thereby provide the biochemical basis for further development of rapamycin and derivatives as novel chemotherapeutic agents.